Berkshire Hathaway's Planned Kraft Heinz Sale Intensifies Existing Risks Amid Split Uncertainty

What happened

Berkshire Hathaway has filed to sell up to 325 million shares of Kraft Heinz, causing the stock to slide in after-hours trading and highlighting waning confidence from a key anchor investor. This move follows Berkshire's earlier board exit and multi-billion dollar writedown, as noted in the DeepValue report, which frames it as a symbol of lost long-term sponsor patience. Kraft Heinz is already grappling with a complex, execution-heavy plan to split into two companies by late 2026, alongside persistent North American volume declines of around -3.5% and a Moody's downgrade review due to capital-structure uncertainties. The sale adds near-term selling pressure and could exacerbate concerns about the company's ability to maintain investment-grade ratings and its high dividend through the transition. Ultimately, this event reinforces the fragile market sentiment and high risks outlined in the analysis, emphasizing the need for caution.

Implication

Berkshire's planned sale signals deepening skepticism from a major long-term holder, likely increasing stock volatility and raising the stakes for Kraft Heinz's upcoming separation and credit reviews. It may prompt rating agencies to act more aggressively, heightening the risk of downgrades that could elevate borrowing costs and threaten the sustainability of the 6.8% dividend. For current shareholders, this underscores the urgency of monitoring quarterly volume trends and separation-related disclosures for signs of stabilization or further deterioration. New investors should remain on the sidelines, as the attractive entry point of $20 per share remains contingent on resolving these uncertainties, and the wait-and-see approach is now more critical. In the long run, this development could erode investor confidence further, making it harder for Kraft Heinz to execute its split without additional impairments or financial strain.

Thesis delta

The DeepValue thesis already recommended a WAIT rating due to risks around the split, rating downgrades, and dividend sustainability. Berkshire's sale confirms the loss of a key anchor investor, potentially accelerating downside scenarios such as a credit downgrade or dividend cut, but it does not fundamentally alter the core need for patience until clarity emerges on these fronts. Thus, the thesis remains unchanged but with heightened urgency, reinforcing the view that investors should avoid new positions until rating outcomes and pro forma disclosures provide a clearer risk-reward picture.